SEOUL: Korean cosmetics brands are moving aggressively into neighbouring markets, leveraging the regional enthusiasm for Korean pop culture to challenge leading Western brands.
In recent years the country's TV dramas, films and music have gained a following across Asia to such an extent that some observers claim Korean pop culture is now a possible alternative to a globalised US culture.
And for cosmetics brands, endorsement by Korean stars, males and female, is proving successful in driving brand awareness and sales in new markets. The Korea Pharmaceutical Traders Association reports that sales outside the country are increasing at more than 30% a year, with China a major growth market.
Price is another factor, noted Yang Ji-hye, an analyst with Kyobo Securities. "Korean players are doing particularly well in the low- to mid-end segment, outpacing some western rivals, as their product quality is good relative to prices," she told the Financial Times.
A recent limited survey by the Seoul Business Agency, reported in Business Korea, backed up that assertion, finding that just 4% of Chinese consumers aged 20-39 thought Korean cosmetics were expensive. Some 62% felt such products suited them well, while 27% said they were trendy.
For these consumers online shopping was a preferred option, with 26% buying their Korean cosmetics via this route rather than in traditional large markets (3%). In addition, 21% said they visited Korea in order to purchase.
Amore Pacific, Korea's largest cosmetics firm, is hoping its flagship brands Laneige and Mamonde will help it generate half its sales in overseas markets by 2020, compared to the current figure of 16%.
But with its market share in China estimated to be less than 3%, according to Euromonitor International, it still has some way to go before it can rival the likes of L'Oréal (16.8%), Shiseido (10.3%) or P&G (9.8%).
Korea is also the largest market in the world for men's skin care products, accounting for 21% of global sales. Euromonitor International noted that this trend had been boosted by South Korean male celebrities endorsing skin care brands.
It further suggested that for buyers the interest in male cosmetics began during national service when soldiers used camouflage face paint that offered moisture and sun protection for their skin.
Data sourced from Financial Times, Business Korea, Euromonitor International; additional content by Warc staff